In 2025, Australian super funds are poised to expand their investments overseas despite recent sell-offs, signaling a shift towards seeking opportunities beyond domestic borders. Research conducted by Chant West suggests that both industry and retail super funds are increasingly looking to diversify their portfolios by allocating more funds to overseas investments, particularly in unlisted asset classes like infrastructure and private equity.
According to Mano Mohankumar, a senior investment research manager at Chant West, many super funds already have substantial investments in unlisted assets. The trend now is to explore more opportunities abroad where the investment landscape offers a wider array of options. While overseas investments are gaining traction, Australian assets will continue to hold significance in super funds’ investment strategies.
Recent developments indicate a reconfiguration of asset allocations within various classes, with a noticeable shift towards emerging sectors such as digital infrastructure and energy transition investments. This trend is expected to persist, reflecting a strategic move by funds to adapt to changing market dynamics and capitalize on evolving sectors.
Grant Kennaway, the head of research at Zenith, highlights a growing demand for enhanced transparency in disclosing managed fund and super fund fees and portfolio holdings. This push for regulated transparency is seen as a positive development for investors, enabling research providers to offer more insightful information. Clearer visibility into portfolio compositions not only enhances investor confidence but also fosters a more transparent and accountable investment environment as Australia’s superannuation system expands.
Moreover, the intensifying competition among fund managers is driving a downward trend in fund fees, benefiting investors and super fund members seeking cost-effective investment options. This competitive landscape is reshaping the industry, emphasizing the importance of delivering value to investors through competitive fee structures and transparent investment practices.
As super funds navigate through a changing investment landscape, the focus on overseas opportunities and enhanced transparency underscores a broader industry trend towards globalization and investor-centric practices. By diversifying portfolios, embracing emerging sectors, and promoting fee transparency, Australian super funds are poised to navigate the evolving financial terrain, offering investors a more dynamic and competitive investment landscape.
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